BOSTON (AP) -- Federal Securities and Exchange Commission investigators have recommended that civil complaints be filed against the Massachusetts Turnpike and two former Big Dig executives, according to a published report.

Published 12:00 am, Saturday, September 7, 2002

The recommendation comes as the federal agency continues its investigation into the massive downtown Boston road project following news two years ago that the project had a $1.4-billion cost overrun.

The SEC probe could lead to charges against former Turnpike chairman James Kerasiotes and former project manager Patrick Moynihan, The Boston Globe reported Friday, citing unnamed officials familiar with the case.

Kerasiotes, Moynihan and other Turnpike officials are suspected of failing to disclose knowledge of the huge cost overrun to bond rating agencies prior to the state, the Massa-chusetts Bay Transportation Authority and the Turnpike issuing bonds in 1999.

Kerasiotes, now an executive in a Boston human resources firm, Moynihan and attorneys for the Turnpike all have said they went public Feb. 1, 2000, with the overrun as soon as they knew the true amount. They also say no investor was harmed, and there is no evidence they enriched themselves through any deception.

The Turnpike Authority is overseeing the $14.6 billion Central Artery-Third Harbor Tunnel project, expected to be completed in late 2004 or early 2005.

Juan Marcelino, the SEC's district administrator in Boston, said the agency cannot confirm or deny the existence of an investigation.

The Globe said that with the investigators' findings forwarded to Washington, the SEC's general counsel and the director of enforcement will examine the case to determine if it should be sent along to the SEC's five presidentially appointed commissioners. The commissioners could file civil complaints in federal court, initiate an internal legal proceeding before an administrative law judge or drop the matter entirely.

Meanwhile, Turnpike officials are contemplating a settlement with the SEC in the case which so far has cost the Turnpike more than $2.5 million in legal fees.

"As Turnpike Authority chairman, I will work with the Securities and Exchange Commission in the best interest of the taxpayers of Massachusetts and the best interest of the Turnpike Authority," Turnpike chairman Matthew Amorello said Friday.

Turnpike board members Christy Mihos and Jordan Levy said Friday they have not talked with SEC officials and aren't targets of the investigation.